What is employee liability insurance?

All employers have to have employee liability insurance so that if anyone employed in the business is injured or becomes ill because of the work they are doing, they will be able to be compensated.

All employers have to have employee liability insurance so that if anyone employed in the business is injured or becomes ill because of the work they are doing, they will be able to be compensated. Many people use the word ‘protect’ when they talk about insurance, but of course having insurance doesn’t make anyone safer. All it does is make sure that there is financial backup should the worst happen. As an employer, you are still very much the person responsible for your employees’ health, safety and wellbeing whilst they work for you.

When you start any business, especially if you are a mum working from home, probably part time, the last thing on your mind is taking on staff but you would be surprised at the short time it often takes for a business to need more help. If you employ close family members you are not compelled by law to take out employee liability insurance, but of course commonsense suggests that you will do so anyway, because your family deserve the best financial back up you can give them. It is simply a matter of it not being the law to provide it. If you are in the business of contracting to perform a specific task, you will probably be employing temporary staff, but this is fine; your insurance policy will cover numbers of people, not specific individuals.

Insurance companies will be happy to help you when you first realize you need insurance, but for all legal issues in business, expert advice is a good idea. When you take out your policy, a good insurance company will give you information on what your responsibilities are as an employer, over and above taking out the insurance. If you and your employees work with anything hazardous, there are COSHH guidelines to help you with how to deal with them and these should be copied to every employee. Protective clothing should also be made available to everyone and training should be given where appropriate. This is important because if you don’t do this, you may find your policy is void. If you are a sole trader, this could mean that you may be personally sued and the consequences could be catastrophic.

As a business which began as just one person working from home part time, suddenly you might find yourself as a major employer. Before you take the step from working for yourself to having staff, you need to take a hard look and decide whether you want to keep your business small and simple or grow the business and take on more responsibilities. In the end, if you are a woman entrepreneur with real vision, you will be happy to take on the legal side to see your business start up really flourish and perhaps help other mums to find work in the home or outside it. Flexible work arrangements need a bit of back up and so with a staff you can make sure that you can maintain your work life balance.